Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Chinese data sustains the mood of financial markets

14.55 AEDT, Monday 3 December 2012

Chinese data sustains the mood of financial markets


By Tim Waterer (Senior Trader, CMC Markets)

In the absence of progression on the US budget talks, it was left to some rosier-looking Chinese data to sustain the mood of financial markets. PMI data coming in at a seven-month high on the weekend helped Asian markets get off to a decent start to the new trading week. Further numbers today from China are also helping reinforce the view that the world’s second largest economy may have turned the corner.

Chinese economic indicators of late have given the market reason to cheer, which is helping to offset the negative sentiment from the Washington stalemate. In fact, if it were not for the recent manufacturing readings from China coming in above the 50 mark (indicating expansion) then we likely would have been seeing plenty of one way traffic to the downside from markets. The Chinese numbers of late could be considered to be a saviour of sorts, which is helping the market to retain recent gains.

While Chinese numbers today were solid, the same could not be said for Australian retail sales data, which came in disappointingly flat (forecast was for a 0.4% rise). The soft result sent the AUDUSD rate below 1.04 however a recovery effort by the currency was made when the Chinese economic releases came out. The AUD will likely remain under pressure in the lead up to Tuesday’s RBA rate announcement where it seems only a one in four chance that the RBA holds fire. Given that the central bank will not meet in January it would stand to reason that they may take the opportunity to lower rates at this juncture after last month’s line-ball decision to hold. However, with the chances of a cut already heavily priced into the AUD, if we get the RBA pausing again the potential upside move to the AUD could be in the order of half to three-quarters of a cent.

The Australian sharemarket commenced the new week in much the same fashion as it finished the one prior, with solid gains from key sectors keeping the benchmark ASX200 supported above the 4500 level. Signs of a turnaround in the Chinese economy translated into a sprightly start to the week for Asian markets, despite there still being little advancement in the US regarding avoidance of the fiscal cliff. Locally, the financial sector was among the better performers on the ASX today, while overall, traders were happy to look beyond the soft domestic retail sales data and instead concentrate on the healthier looking Chinese economic indicators.

ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Myrtle Rust: Infections Found At 26 Sites

The affected properties include private gardens, plant nurseries and retailers and an orchard. The stats stand at: 21 properties in Taranaki, 3 in Northland and 2 in Waikato. More>>

Burgers To America: BurgerFuel Opens In The USA

BurgerFuel Worldwide are excited to announce the opening of their first USA based restaurant in Indianapolis, hot off the back of the Indy 500. More>>

English On Budget: Businesses Over-Egg Corporate Tax Cuts

Cutting New Zealand's 28 percent corporate tax rate is "not a panacea in the way business groups sometimes market it," says Prime Minister Bill English. More>>

ALSO:

Auckland Port To Recapture Gas: Union Calls On Ports To Stop Spewing Methyl Bromide

The Maritime Union of New Zealand welcomes the decision by Ports of Auckland to stop releasing methyl bromide emissions into the air. The move to fully recapture the toxic gas after fumigation sets a new benchmark for industry best practice. More>>

ALSO:

Retail: Banks Shoes Calls In Receiver

Banks Group, which runs 14 stores across the country under the brands including Banks Shoes and Shoe Connection, has been tipped into receivership at the request of director John Bank. More>>

ALSO: